A while back we showed the XOI in an ascending triangle stance. Well, it has broken out and the target off of this triangle is... gulp, the 1770's. Hard as it is to believe. There is something in my DNA that does not allow me to momo a market like this, hence I bought some top uranium names that had suffered humiliating declines and a CanRoy that had suffered a similar decline. But I expect a lot of breakout traders have seen this chart and taken note. Edit (12/29 @ 8:10 am) To answer Claude's comment on Uranium, the stocks I have bought were taken near the recent bottom. This could indeed be an a-b-c in the spot price on the way to lower levels, but the stocks have double bottomed and this may be only a trade. I do not have enough of a feel for the dynamics in the energy and industrial metals patches to call the U's an investment quite yet.
Friday, December 28, 2007
XOI Oil Index - Symmetrical Triangle Break Out
A while back we showed the XOI in an ascending triangle stance. Well, it has broken out and the target off of this triangle is... gulp, the 1770's. Hard as it is to believe. There is something in my DNA that does not allow me to momo a market like this, hence I bought some top uranium names that had suffered humiliating declines and a CanRoy that had suffered a similar decline. But I expect a lot of breakout traders have seen this chart and taken note. Edit (12/29 @ 8:10 am) To answer Claude's comment on Uranium, the stocks I have bought were taken near the recent bottom. This could indeed be an a-b-c in the spot price on the way to lower levels, but the stocks have double bottomed and this may be only a trade. I do not have enough of a feel for the dynamics in the energy and industrial metals patches to call the U's an investment quite yet.
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Hello Gary,
ReplyDeleteWith the recent correction the price of Uranium broke down below the 12 months mavg line to $75. It rebouded back to the line ($93) and is now stuck at $90. A possible ABC correction could take the price down to abot $50.
In view of this behaviour, I think the purchase of uranium stocks would be indicated only if and when uranium prices resumed the uptrend by breaking out again above the 12 mos mavg line.
Claude
Gary,
ReplyDeleteConcerning the XOI breakout:
The recent financial integration of Oil as a major currency removes the necessity of having a special “feel for the dynamics in the energy” patch. Your feel for the PM sector can be applied just as well to the energy sector. Both sectors now move in synchrony in reaction to USD depreciation (hope you will post the related chart). Thus, except for considerations of percentage differences in their moves, you can opt indifferently for GLD, XLE, or the XOI, or ASA etc.
Accordingly, I don’t share your reluctance “to momo a market like the XOI” when you are more than willing to momo Gold. Both markets breaking out of triangles, both wildly bullish, both with definable gulp-inducing targets.
Claude